Bonuses for Tea Farmers

Tea Report

Kenya’s bountiful harvest

KENYA

It has been a remarkable year for Kenya’s tea farmers; as a result they received paid higher bonuses than last season. In Kiambyu and Thika, total bonuses will amount to Sh12 billion ($118.5 million), compared to Sh8 billion ($79 million) last year, while for farmers in Kitale and Nandi, bonuses will go up from Sh1.3 billion to Sh2.2 billion [a Kenyan shilling is worth roughly 1 US cent.]

The Kenya Tea Development Agency (KTDA) has announced that bonuses for farmers throughout the industry will total Sh84 billion compared to Sh63 billion last season and an average farmer will earn Sh36 per kilo of tea as the second bonus payment, compared to Sh27 last year.

Farmers in the North Rift are unhappy since their bonuses are lower than in other regions. Prices at the tea auctions have improved since January, with a kilo of tea selling in August for Sh314, the highest recorded price of the year. The higher prices are said to be the result of demand from new emerging markets, a stable exchange rate, stable global tea prices, good crop figures in Kenya, and depressed output from Sri Lanka.

However, Kenya’s high yields and good prices may not continue because of the current cold weather, which is expected to last through to December, and the dry spell that will follow. There are also concerns about rising production costs that are eating into producers’ profits.